(This essay was published in Hong Kong Economic Journal on 5 March 2014)

 

On Women’s Day four years ago, I joined a panel to address the Women’s Commission at a luncheon gathering. Instead of preparing a formal speech for this auspicious occasion, I spoke about one of my childhood memories growing up in Tsim Sha Tsui. By coincidence the luncheon gathering was in a hotel right next to one of the buildings in which I had lived as a child.

 

I spent my childhood in Tsim Sha Tsui from 1954 to 1970, exploring almost every street and back alley. I had abundant time for such explorations and I familiarized myself with the stairways and basements of the “iconic” buildings of the day like Chung King Mansion, Champagne Court and Mirador Mansion. At one point, I thought I knew the place so well that I could find the shortest distance from any point in Tsim Sha Tsui to another by traversing side streets, going through the dark basements of the buildings in between, and cutting through the backdoors of shops and restaurants.

 

I knew many of the familiar faces of the people in the bustling streets of Tsim Sha Tsui. The grocer polishing the apples on display in his store late in the evening, the heavily perfumed woman sitting in a rattan chair at dusk on the street under a balcony fanning vigorously to cool off, the stout boys hauling baskets of fresh produce or cartons of heavy goods from lorries parked outside the market stores in the seething heat of mid-day.

 

I knew the cul-de-sac where cars could be parked like packed sardines and attended to for a modest charge, the joints where officers in uniform collected their regular take, the odd barber shop that had old Marvel comics few were interested in reading, and a bookstore that welcomed me to sit on a stool and read from cover to cover all afternoon without making a purchase. Tsim Sha Tsui was my place and my home. I was nobody there, but I felt I was its enfant omniscient.

 

Our family had lived in six different locations all within two streets of each other. My last residence was an old low-rise building with a balcony that overlooked a street bustling with markets, shops and hawkers. I spent many afternoons and evenings on the balcony watching the activities in the street.

 

Childhood Economic Ideas

 

One hawking cart in particular caught my attention and has stayed in my memory vividly all these years. I was a frequent customer of the stinking tofu cart and the couple that operated this kitchen-on-wheels made a deep impression on me, for reasons that would not be apparent until years later. I noticed the woman seemed to be doing all the work all the time, while the man just hung around.

 

Sometimes he would doze off crouched against the wall behind his wife. At other times he would be smoking and chatting with fellow street hawkers leisurely. I distinctly remember forming an impression of him as lazy and exploiting his hard-working wife. I vaguely remember feeling sorry for the woman. The couple apparently had three children and at least one or two of them were always close by on the street. They sometimes did homework and at other times played.

 

One afternoon, while looking down from the balcony, I heard a warning cry from one of the children, “the police are coming!” The “police” was of course the generic term people then used for “hawker control officers” who came to clear the streets of hawkers and oftentimes to apprehend those who were not swift on foot.

 

I then witnessed the most amazing feat. The lazy bum, who was still dozing, leapt to his feet, swiftly secured the loose items on his kitchen-on-wheels and deftly steered it through the crowd, turning into a side-street at stunning speed without spilling a drop of the burning oil and quickly disappearing from sight into a back alley.

 

At that moment I realized I had misjudged him. It dawned on me that he, too, contributed to the family business, but in a different way. Given the business risks of working as a street hawker, he had to stay cool and in top condition to push his kitchen-on-wheels to safety when “the police” came. The children, too, were contributing as scouts looking out for “the police” while doing homework or playing on the streets. It was clearly a joint family effort. And the contributions of the children also benefitted other street hawkers, a sort of positive externality effect.

 

In the months following, I kept hoping that the “police” would come again for me to watch a repeat of this magnificent feat. Sadly, I never had the opportunity to witness his disappearing act again. Many years later, while watching a television program on the life and habits of lions in the wild, the image of this cool, swift-footed street hawker resurfaced in my mind. The clear division of labor between the “lazy” male lion and his diligent lionesses was a scene familiar to me on the street where I lived.

 

Entrepreneurship and Family Values

 

Street hawking was a hazardous business because it operated outside the framework of the law, and in a profound sense it was no different from the life of lions trying to survive in the wilderness. The relevant law for street hawkers was the law of the jungle, where they had to be swift-footed to survive.

 

By the mid-1970s, I was an economics student at the University of Chicago and a research assistant for Professor Gary Becker who was testing his model on the economics of divorce and separation. As a consequence, I began to learn about his economic theory of marriage and the family.

 

A few years later, I started my doctoral research on self-employment, employers and family businesses in Hong Kong. A very large proportion of the self-employed were street hawkers in 1976, the year for the data I used in my research. The swift-footed street hawker I watched from my balcony became the silent hero of my economics study.

 

I discovered that individuals who operated their own businesses in Hong Kong married at an earlier age and had more children than those who were employees. Such individuals have a strong economic motive to become married and have children because they can then involve more family members to help in the family business. The street hawker I had witnessed from my balcony was not an isolated example.

 

Divorce and Women’s Independence

 

I also found that the husband’s income was higher if he had a better-educated wife, but even more importantly, his gains were even higher if he owned a business than if he worked as an employee for someone else. A woman could help her husband more effectively by contributing to the family business, an opportunity not available to men who were only employees. Children, too, became more valuable if their father owned a business.

 

Better-educated mothers also raised more productive children because mothers typically spend far more time taking care of children than fathers do. This result was first observed in the nineteenth century by Professor Alfred Marshall, founder of the study of economics at Cambridge University. He wrote in his Principles of Economics: “The greatest capital that you can invest in is human capital, and, of that, the most important component is the mother.”

 

My research found the incentive to marry earlier and raise larger families was higher among families that were more entrepreneurial. These families were also economically more productive. Family members complemented each other more effectively both at home and at work if they had a family business. Hong Kong’s entrepreneurial families have contributed not only to the city’s economic success but also raised more stable and arguably happier families.

 

For low-income households, owning a family business like street hawking was an important channel for lifting themselves out of poverty. Women played an important dual role in raising children at home and supporting their husbands in their business. This role was crucial in preserving a stable and happy family.

 

At the other end of the scale, the saddest and most miserable group of men in Hong Kong were those who lived in caged bed spaces. They fell behind not only because they lacked economic skills, but also because they failed to find wives to raise a family. For some of them, China’s opening became their last hope.

 

These men received no help from the Housing Authority, whose public housing allocation criteria favored married couples over single men. Yet, as if cursed by a strange fate, the same public housing allocation criteria have become an accomplice in encouraging low-income households to divorce. Hong Kong’s divorce rate today is among the top 10 in the world (see Table 1).

 

Table 1: Top Divorce Rate Countries

 

Rank Country Divorce Rate
1 Russia 4.8
2 Belarus 4.1
3 United States 3.6
4 Gibraltar 3.2
5 Moldova 3.1
6 Belgium 3.0
7 Lithuania 3.0
8 Cuba 2.9
9 Czech Republic 2.9
Hong Kong 2.9
10 Switzerland 2.8
11 Ukraine 2.8

 

Why has this happened? Rising divorce rates have been a common fate in most developed economies. Hong Kong simply experienced an unusually rapid increase. Part of the reason is the improving job market opportunities of women. More women graduate from university today than men and their academic achievements are on average higher. This makes them less likely to be held hostage to an unhappy marriage. Divorce for them is a less-feared alternative based on economic considerations.

 

Social Consequence of Family in Crisis

 

But it is almost universally observed that divorce rates are higher among low-income families. This is where Hong Kong’s public housing allocation criteria and the easy availability of cross-border remarriage opportunities have aggravated the situation.

Consider an unhappily married low-income couple living in public rental housing that does have not a family business such as street hawker. If they divorce, the woman will most probably continue to stay in the public housing unit, probably with her children. If her children are very young and she has to care for them, she will have to receive support from somewhere, probably the Social Welfare Department, as she cannot work. Children that grow up in these broken families in public housing estates are less likely to move ahead economically and socially.

 

The man will move out and probably only be able to afford to rent a sub-divided housing unit in the private market. Some might live across the border where housing is cheaper. This divorced man will sooner or later realize that his best chance for improving his lot – housing and social life – is to remarry. He can then get back in the queue to apply for public rental with a better chance of success.

 

In the past, a divorced man faced a life of living in a caged bed space (the precursor of today’s sub-divided housing unit) because it was difficult for him to get remarried. Today there are better marriage opportunities across the border for men with low incomes.

 

In 2011, of the 58,369 marriages in Hong Kong, 39,979 were first-time marriages and 18,268 were remarriages. The number of divorces was 19,597. There were altogether 176,000 divorced women and 92,000 divorced men. Remarriage opportunities were far more available for divorced men than for divorced women but still, the number of divorced individuals per thousand households has increased from 9.5 in 1971 to 117.4 in 2011. The evidence that Hong Kong’s social and moral fabric is seriously in trouble is loud and clear. It will certainly threaten the economic prospects of the younger generation.

 

Some 60,000 divorced men and 111,000 divorced women live as tenants in rented housing units. The corresponding numbers for those living in self-owned housing units are much lower, at 33,000 and 65,000, respectively. The number of divorced individuals per thousand households is 153 among tenants and 78 among homeowners. Homeownership obviously keeps a family closer together.

 

I am afraid I do not have a more uplifting message to deliver on Women’s Day except to salute the women of Hong Kong for having contributed to our community’s economic success and social stability over the years, especially the women from low-income families. They have kept their families together, cared for their children and supported their husbands. They are the bedrock on which our economy and society have flourished.

 

The future is unfortunately less promising and certainly more challenging. Four years ago, I delivered a much more upbeat message on Women’s Day because I had not realized the Hong Kong family had come under such duress. I hope today’s message is not too late. The panel four years ago had two other speakers who have since become much more important to Hong Kong’s future. They were Mr. Leung Chung-Ying and Mr. Lam Woon-Kwong. I hope they will heed today’s less upbeat message.

 

References

 

Gary S. Becker, A Treatise on the Family, Harvard University Press, 1981

 

YCR Wong, “Entrepreneurship, Marriage, and Earnings”, Review of Economics and Statistics, November 1986

 

YCR Wong, “The Role of Husband’s and Wife’s Economic Activity Status in the Demand for Children”, Journal of Development Economics, April 1987

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